Bank Of England Says Cash Still Reigns Supreme In UK

Digital payments and cryptocurrencies like bitcoin may be getting all the attention, but that doesn’t mean cash doesn’t still reign supreme. At least, that’s the case in England anyway, with Bank of England’s (BOE) Chief Cashier Victoria Cleland adamantly stating that “cash is not in decline.”

Cleland made the remarks at the Future of Cash Conference in Vienna, Austria, on Oct. 5, continuing the argument that, despite the fact that non-cash purchases and transactions are on the rise in the U.K., the amount of currency being circulated in England’s economy is also increasing.

“Very notable in the U.K. is the rise in the use of contactless cards, which tripled in 2016, accounting for 7 percent of payments. The shift in consumer preferences is also evident in online spending, where average weekly online shopping in the U.K. was £1.1 billion in August 2017; an increase of 16 percent compared with August 2016. Such developments have led many commentators to predict the demise of cash,” she said.

“But the numbers show a different story,” Cleland continued. “In 2016, the value of Bank of England notes in circulation increased by 10 percent, reaching over £70 billion in the run-up to Christmas: the fastest growth in a decade. Cash remains the most widely used payment method in the U.K. It accounted for 40 percent of all payments and 44 percent of payments made by consumers in 2016.”

She pointed to a recent international survey by ING that showed 79 percent of people in the U.K. said they will never go completely without their pound notes — which is in line with the 76 percent of people who said the same thing in all of Europe.

Victoria Cleland stated at the Future of Cash Conference that it’s puzzling that digital payments and currency usage are rising together, and solving that conundrum will be key in understanding why consumers use U.K. pounds at all. She said an important benefit of physical currency is that it’s tangible and can be used as a budgeting tool. Not to mention it’s a “quick and easy payment method,” which works when card terminals are down.

“Cash is relied on by some and valued by many: 2.7 million people in the U.K. rely almost entirely on cash transactions — a number that has increased by 0.5 million since 2015,” she said.